Síldarvinnslann (SVN) Q2 2024 earnings summary

Executive summary

• Revenue and profitability declined sharply in Q2 and H1 2024 due to lower prices, cost increases, and the absence of capelin catch compared to last year.

• H1 2024 revenue was $141.7 million with net profit of $9.3 million, down from $42.7 million in H1 2023.

• Capelin shortfall and lower fishmeal and oil prices weighed on results; overall outcome deemed unsatisfactory.

• Uncertainty persists in groundfish processing due to volcanic activity near Grindavík, though operations resumed in May.

• The company remains one of Iceland's largest pelagic fishing and processing firms.

Financial highlights

• Q2 2024 revenue: $60.3m (down from $79.6m in Q2 2023); EBITDA: $6.6m (down from $21.1m); net loss: $(1.9)m (vs. $13.2m profit).

• H1 2024 revenue: $141.7m (down from $211.0m in H1 2023); EBITDA: $25.8m (down from $60.7m); net profit: $9.3m (down from $42.7m).

• Total assets at June 30, 2024: $1,043.3m (down from $1,098.9m at year-end 2023); equity ratio: 59.5%.

• Cash at period end: $75.5m (down from $81.7m at year-end 2023).

• Fishing and processing segments generated $67.9m and $103.2m in sales, with segment EBITDA of $14.9m and $14.8m in H1 2024.

Outlook and guidance

• 80% of fishing quotas already caught; mackerel processing strong with higher prices than last year.

• New quota year starts September 1; quotas stable for groundfish.

• Despite significant H1 contraction, full-year guidance remains unchanged but expected at the lower end.

• Ongoing uncertainty in Grindavík due to natural disasters impacts operations and future planning.

• Management is focused on addressing challenges in the whitefish segment and will revisit sales/marketing structure later.